Disrupting the Automotive Supply Chain

The automotive industry is in the midst of a massive shift, likely larger than the one we saw with the invention of the electric starter engine back in 1908. The breakneck speed of advancement in technology have caused many experts to predict that the automotive supply chain will be extinct as we know it in the next 10 years. Many experienced professionals are predicting that the differentiating source of value in the automotive industry will not be parts or engines, but software and technology. Let’s take a look at three segments of the automotive supply chain that will be key distruptors.

The autonomous vehicle will be here before we know it. It will have a much bigger impact than just impacting your local Uber or Lyft service. In the next five to ten years, autonomous cars for consumers will begin to be produced at scale. We can see some advancements in this technology already being implemented, such as automatic accident-prevention breaking and assisted parallel parking. Cars will soon transform from just a mode of transportation into a passive new-age entertainment hub that surrounds consumers for an average of five hours a week.

The Internet of Things (IoT) offers the automotive supply chain a number of benefits inside and outside the factory that were unheard of five years ago. One factory uses RFID chips to keep the movement of parts to a minimum while also reducing damage and loss. In addition, these technologies can also track the status of work in process, manage shipping containers, and improve worker safety on the factory floor.

Emerging digital retail systems combined with social media have shifted the vehicle purchase process from the showroom to the living room. Consumers can design and select all of the specifications of their new vehicle on their laptop or tablet without even visiting a car dealership. This process forces the automotive supply chain to be tighter, flexible, and more responsive than ever before. The bespoke level of automotive customization that is emerging will reward the automotive supply chains that have the foresight to become agile and customer friendly as technology advances.

How do you see the automotive supply chain evolving in the future? Share your thoughts in the comments section.